Chicago Board of Trade (CBOT) corn futures surged to a 16-month high above $5 per bushel on Tuesday, driven by strong U.S. export demand and expectations of tightening inventories. This rally, which also lifted wheat and soybean futures, marks a recovery from the market downturn last year when oversupply pushed prices to their lowest levels since 2020.
Corn Prices Break Key Resistance Level
The most active corn contract closed at $5.02 per bushel, up 5-¾ cents, surpassing the crucial $5 threshold. Analysts believe this milestone could encourage farmers to increase sales of their stored crops, capitalizing on higher prices.
Despite rising prices, demand for U.S. corn remains robust. The U.S. Department of Agriculture (USDA) reported that 1.6 million metric tons of corn were inspected for export last week, exceeding analyst expectations of 975,000 to 1.4 million metric tons.
Wheat and Soybeans Follow Corn’s Lead
CBOT wheat futures climbed to their highest level since October, with March contracts closing at $6.04-¾ per bushel, up 4-¾ cents. March soybeans also gained, rising 2-½ cents to $10.38-½ per bushel, supported by spillover strength from corn.
While corn supplies are expected to tighten, the outlook for soybeans remains stable. U.S. soy processors crushed the second-largest volume of soybeans in history in January, according to data from the National Oilseed Processors Association. Meanwhile, Argentina, a key soy and corn supplier, received much-needed rainfall over the weekend, helping to prevent further drought-related losses, according to the Rosario Grains Exchange.
Trade Uncertainty and Weather Risks in Focus
Market participants are closely watching potential trade developments under President Donald Trump’s administration. While new tariffs could disrupt agricultural trade, some analysts believe they may encourage foreign buyers to increase U.S. grain purchases.
Weather conditions in key wheat-producing regions are also being monitored. Cold temperatures in Russia and the U.S. could damage winter wheat crops, adding another layer of uncertainty to global grain markets.
As corn futures continue their upward momentum, traders remain focused on supply outlooks, global weather patterns, and potential trade policy shifts that could further influence grain markets in the coming months.
